{"id":63496,"date":"2024-05-14T10:05:46","date_gmt":"2024-05-14T17:05:46","guid":{"rendered":"https:\/\/energi.media\/?p=63496"},"modified":"2024-05-14T10:08:03","modified_gmt":"2024-05-14T17:08:03","slug":"biden-detonates-a-bomb-in-energy-arms-race-with-china","status":"publish","type":"post","link":"https:\/\/energi.media\/markham-on-energy\/biden-detonates-a-bomb-in-energy-arms-race-with-china\/","title":{"rendered":"Biden detonates A-bomb in clean energy arms race with China"},"content":{"rendered":"

\u201cA 100% tariff will probably be enough to keep essentially all made-in-China EVs out of the US.\u201d – economics blogger Noah Smith<\/strong><\/h2>\n

President Joe Biden today <\/span>erected<\/span><\/a> a very large fence around American clean energy manufacturing. Tariffs on imports from China now range from 25 per cent on steel to 100 per cent on electric vehicles. Will this move supercharge budding US industries or make them less competitive? Either way, the White House officially entered the global clean energy arms race that China began 25 years ago. Is Canada likely to sign up?<\/span><\/p>\n

\"\"While the rest of the world was outsourcing its manufacturing to China beginning in the 1980s, China\u2019s communist government was creating a sophisticated approach to manufacturing the energy technologies of the future, according to Canadian industrial policy expert Bentley Allan, who teaches at Johns Hopkins University. The graphic above illustrates China’s dominance of solar manufacturing.<\/span><\/p>\n

\u201cChina\u2019s industrial strategy targeted not just assembly but the creation of an entire digital mobility ecosystem,\u201d he <\/span>tweeted<\/span><\/a> about the country\u2019s aggressive electric transportation sector. \u201cIt is integrated vertically into supply chains and horizontally into multiple technology systems.\u201d<\/span><\/p>\n

What this means in simple terms is that China invested heavily in developing and scaling up the core clean energy technologies: wind, solar, batteries, EVs, heat pumps, and electrolyzers (for making hydrogen). At the same time, its governments aggressively supported growing all the companies that make the inputs into those technologies. Furthermore, the same approach was used to grow related industries, like semi-conductor chip manufacturing.<\/span><\/p>\n

\"\"<\/p>\n

Consequently, China has emerged from the COVID-19 pandemic as a clean energy manufacturing colossus, much the same as the United States was the premier industrial power after World War Two.\u00a0<\/span><\/p>\n

The Americans, not surprisingly, don\u2019t view China this way. The US says China is dumping (selling goods for less than the cost of production).<\/span><\/p>\n

\u201cChina\u2019s unfair trade practices concerning technology transfer, intellectual property, and innovation are threatening American businesses and workers,\u201d Biden\u2019s tariff backgrounder complained. \u201cChina is also flooding global markets with artificially low-priced exports.\u201d<\/span><\/p>\n

China says the US is scared of competition, as I pointed out in a recent <\/span>column<\/span><\/a>.<\/span><\/p>\n

\u201cBehind the formulation of the \u2018China’s overcapacity threat theory\u2019 is nothing more than to curb China’s industrial upgrading and development, and to protect the vested interests of certain Western countries in the\u00a0<\/span>global industrial and supply chains by unfair means,\u201d <\/span>says<\/span><\/a> state-owned Xinhua News Agency,<\/span><\/p>\n

\u201cIts essence is to maintain monopoly status and protect backward production capacity.\u201d<\/span><\/p>\n

Ironically, this could happen, says Canadian economist Chris Bataille: \u201cThe US has to use this moment to learn how to become as good or better than the Chinese at making EVs, not trying to stop the clock on time.\u201d<\/span><\/p>\n

Ford and GM, for example, have recently stumbled. The new Chevy Blazer suffered from software problems and was recalled. After a promising start, production of the popular F-150 Lightning pickup was scaled back in the face of flagging consumer interest.<\/span><\/p>\n

BloombergNEF analyst Corey Cantor recently told me that he\u2019s not as worried about the legacy automakers. Pivoting to electric while still making internal combustion engine vehicles is no easy feat, he argues.\u00a0<\/span><\/p>\n